Homes in cities are the least affordable since

Property prices in Britain’s cities have become so high they are the most ‘unaffordable’ since 2007 when viewed against average annual wages.

Increasing numbers of people are having trouble getting on or moving up the property ladder as prices are up to seven times average annual earnings.

Oxford is a prime example of how skewed the property market in certain areas has become, with prices typically 11.5 times average yearly wages.

Back in 2007, the average cost of a home in one of Britain’s best known cities was around 7.5 times average annual earnings.

Following the ebbs and flows of the financial crisis, by 2012 the typical cost of a home in cities had fallen to 5.6 times the amount of an average pay packet.

Fast forward to 2018 and as well as Oxford, popular areas in Cambridge, Bath, Greater London and Winchester have all become out of reach for many, with property prices at least 10 times average annual salaries.

In the last five years, the average cost of a home in a city has risen by 36 per cent, from £171,745 in 2012 to £232,945 last year, Lloyds Bank said.

While house prices in places like Cambridge have risen by 47 per cent in the last decade, salary growth has stalled.

Average annual earnings in cities up and down the country have risen by just 9 per cent to around £33,420. 

Unaffordable: Oxford has the worst house price to average earnings ratio 

For those looking for better value in the housing market, head to Stirling, Londonderry, Bradford, Lancaster and Durham. Here, property property prices are five times or less above average annual salaries. In Stirling the average cost of a home is £186,084.

Taking other examples of where your money will stretch further, in Sunderland the average price of a home is 5.1 times average annual wages, while in Dundee it is 5.4 times average salaries. 

Lancaster and Dundee are the only two new entrants to the top 10 most affordable cities, sitting in fourth and ninth place respectively and all of the top 10 are located outside of the south of England. 

Andy Mason, Lloyds Bank mortgage products director, said: ‘City living suits the lifestyles of many people looking for shorter commutes with much of what they need on their doorstep, but buying a city property is the least affordable it’s been for a decade.’

He said there was also a ‘clear North-South divide’, with the least affordable cities list dominated by locations in southern England.

Affordable: Londonderry’s housing market is still affordable, Lloyds Bank said

In 2007, the average cost of a home in a city was £207,750, while average annual wages stood at £27,576. When the financial crisis started to bite, house prices dropped to an average of £182,467, but salaries crept up to around £28,879.

After the heat of the financial crash passed, average house prices stood at £180,548 in 2013, rising to £232,945 by the end of last year.

According to Nationwide’s latest figures, average UK house prices increased by 3.2 per cent in 2017, generating a level of ‘surprise’ as mortgage approvals are down and consumer spending remains sluggish. 

The unexpected rise in annual property inflation emerged against a backdrop of a slowing property market. The overall picture masks a divergence between sluggish areas in London and the commuter belt and greater activity in the Midlands and the North. 

Undoubtedly, the housing market will continue to be a political hot potato this year, with all eyes on rising interest rates, population growth, the interplay between supply and demand and price fluctuations. 

Earlier this month, official figures from the Office for National Statistics revealed that the average cost of a home in the UK was £226,000 in November, which is £11,000 more than at the same point a year earlier.

On the up: In the last five years, the average cost of a home in a city has risen by 36 per cent